Will they or won’t they?

WILL THEY OR WON’T THEY? President Donald Trump and Japanese Prime Shinzo Abe could agree to launch talks on a bilateral free trade agreement coming out of their meeting today in Mar-a-Lago, but White House chief economic adviser Larry Kudlow cautioned on Tuesday that the issue was still very much up in the air.

Story Continued Below

"As I've said before, this is all on the table," Kudlow said, when asked by reporters about the possibility of the two leaders agreeing to launch trade talks and Trump deciding to exempt Japan from new steel and aluminum tariffs. "That's why this is such an important meeting. But I don't want to get ahead of that curve. I really don't."

The former TV economics commentator also faced a torrent of questions on the possibility of the United States rejoining the Trans-Pacific Partnership after news last week that Trump directed him and U.S. Trade Representative Robert Lighthizer to look into the issue. Kudlow emphasized that no decision had been made.

"In policy content terms, it's never been to our liking," Kudlow said. "If we choose to go down that path, however, to 'improve it,' we will have to be convinced that it's worth our while. And I don't think the president is yet convinced of that, to be honest. I don't think he is."

Trump and Abe are sure to discuss the idea, "but for the American side, at the moment, it's more of a thought than a policy, that's for sure," Kudlow added. Read the full story from Doug Palmer here.

Trump tweets on TPP: After dining with Abe in Florida on Tuesday night, Trump signaled on Twitter that he may not be too keen on rejoining TPP in the end, despite the Japanese leader’s preference for the U.S. to return to the pact rather than pursue a bilateral deal with Japan.

“While Japan and South Korea would like us to go back into TPP, I don’t like the deal for the United States. Too many contingencies and no way to get out if it doesn’t work. Bilateral deals are far more efficient, profitable and better for OUR workers. Look how bad WTO is to U.S.,” Trump wrote.

It’s unclear why Trump mentioned South Korea since the country was not a participant in TPP negotiations and is not a member of the agreement among the 11 remaining participating countries. It’s also unclear what Trump meant when he said there was no way to get out of the deal as Article 30.6 of the final agreement established a withdrawal process similar to what is in NAFTA.

IT’S WEDNESDAY, APRIL 18! Welcome to Morning Trade, where your host believes TPP has not lived its last day in the American news cycle. Got any actual trade news to share? Let me know: abehsudi@politico.com or @abehsudi.

POLITICO Space is our new weekly briefing on the policies and personalities shaping the second space age. Sign up today.

** A message from ACTION for Trade: A modernized NAFTA must strengthen intellectual property protections and commit countries to value American innovation and creativity. Negotiators should ensure the global economy rewards innovators and protects creative assets. Learn more: actionfortrade.org**

COMMERCE TAKES MATTERS INTO OWN HANDS: The Commerce Department late Tuesday said it will hit imports of Chinese alloy aluminum sheet with preliminary countervailing duties, marking the first time in more than 25 years that the U.S. has imposed duties as a result of a self-initiated trade investigation. The imports, valued at more than $600 million in 2016, will be hit with preliminary tariffs of between 31 percent and 113 percent, depending on the company. The preliminary results of a separate anti-dumping investigation, which will likely result in even more tariffs, are expected to be released in mid-June, Commerce said in a fact sheet.

“The department self-initiated this case to defend the domestic aluminum industry from unfair Chinese trade practices,” Commerce Secretary Wilbur Ross said in a statement. “Today’s preliminary decision allows U.S. producers to receive relief from the market-distorting effects of potential government subsidies while we continue our investigation.”

The case is part of the Trump administration’s push to crack down on unfair trading practices. One prong of attack has been the promise of even more trade remedy cases initiated by the government as opposed to being petitioned by private industries. Commerce will make final determinations in both the AD and CVD cases by the end of August, with the U.S. International Trade Commission due to make a final injury determination by Oct. 15.

USTR MUM ON TARIFF EXEMPTION TALKS, AS NEW CHALLENGES FILED: The European Union and India have preserved their ability to retaliate against U.S. steel and aluminum tariffs by formally requesting talks on the matter at the World Trade Organization.

The two trading partners, like China before them, have decided to treat the U.S. steel and aluminum tariffs as a “safeguard” action, even though the Trump administration said it imposed them to deal with a threat to U.S. national security.

The WTO's Safeguards Agreement requires a country taking a safeguard action to compensate other countries by granting them lower tariffs on other exports. If the country fails to offer compensation, the affected countries may retaliate in kind.

Brussels has repeatedly said it still hopes to secure a permanent exemption from the U.S. tariffs, but that it needs to take this step to meet WTO guidelines and to reserve its rights in case it is ultimately hit by Trump's tariffs.

Trump temporarily exempted the EU from the tariffs along with six other trading partners — Australia, Brazil, Argentina, Canada, Mexico and South Korea — to give them time to strike some other deal to address national security concerns.

But that May 1 deadline is now less than two weeks away and only one country — South Korea — has struck such a deal. Seoul agreed to a quota on its steel exports to the United States to avoid the new 25 percent tariff but has to live with the new 10 percent aluminum tariff. USTR did not respond to an email asking for update on talks with the six remaining countries.

WAYS AND MEANS DEMOCRATS PRESS BRADY ON NAFTA HEARINGS: Two top Democrats on the House Ways and Means Committee urged Chairman Kevin Brady to hold a pair of hearings with administration officials to update Congress on the NAFTA renegotiation amid signals of progress in the talks.

In letters to Brady sent Tuesday, ranking member Richard Neal and Bill Pascrell are urging the Texas Republican to convene two separate meetings — one with the members of the Ways and Means Committee and one with the members of the House Advisory Group on Negotiation, a panel established under Trade Promotion Authority. HAGON, as it is sometimes called, is comprised of the chairman and ranking member of roughly a dozen House committees that have jurisdiction over provisions of law affected by trade agreements.

In both letters, Neal and Pascrell note that the administration has begun to signal "clear intentions to conclude" NAFTA talks "in the very near term."

"A hearing would provide committee members a critical opportunity to examine the administration's progress and conduct the necessary oversight of the administration's efforts," they wrote in one letter, sent on behalf of Ways and Means Democrats.

In the second letter, sent on behalf of HAGON Democrats, they noted that meetings with the advisory group are mandated under TPA legislation but that not a single session has been held since May — well before the NAFTA renegotiation kicked off in August.

USTR THREATENS WTO ACTION ON CHINA SORGHUM DUTIES: The U.S. could potentially launch a case at the WTO over new Chinese anti-dumping tariffs on U.S. sorghum.

“China has a history of abusing its trade remedy laws," USTR spokeswoman Emily Davis said Tuesday. "We will carefully review China’s measures on sorghum and take action as warranted, including through a WTO case if appropriate.”

The move came the same day that China's National Development and Reform Commission announced a timeline to lift ownership limits for foreign car, ship and aircraft makers — a step toward opening up the Chinese market for foreign investment that will likely be welcomed by the White House.

The White House denounced the "unfair targeting" of U.S. sorghum in a statement and said while it appreciated the move on autos, it will "await actual implementation of any policy change,” deputy press secretary Lindsay Walters said in a statement.

LAWMAKERS PRESS OFFICIALS ON NAFTA DAIRY DAZE: U.S. lawmakers are pressing dairy trade issues on two fronts, with letters urging U.S. and Canadian officials to address through NAFTA talks Canada’s controversial milk pricing program that U.S. farmers have accused of cutting them off from what had been a lucrative export market. The additional missives this week follow a similar letter Senate Minority Leader Chuck Schumer sent to Lighthizer on Tuesday. But Agriculture Secretary Sonny Perdue said at a Senate appropriations hearing last week that he wasn’t optimistic for a great outcome on dairy issues in the ongoing NAFTA talks.

“We applaud Ambassador Robert Lighthizer’s commitment to eliminating dairy tariffs and removing pricing manipulation, such as Canada’s Class 7 milk pricing program, and we call on you to engage with U.S. negotiators to address the remaining trade barriers that harm consumers and producers in both countries,” Sens. Pat Toomey, Ron Johnson, Mike Lee and Cory Gardner said in a letter sent Tuesday to Canadian Foreign Minister Chrystia Freeland and Canadian Ambassador to the U.S. David MacNaughton.

The senators said any actions by Canada on dairy “will be received as a sign of good faith” to complete the NAFTA talks.

Meanwhile, the entire GOP delegation of New York House members sent Lighthizer a gentle reminder this week “to prioritize the elimination of Canada’s Class 7 pricing program and dairy tariffs.”

“As NAFTA talks wrap-up, we look forward to working collaboratively with you to protect our dairy farmers, the backbone of New York’s economy and local economies through the nation,” the lawmakers wrote in their April 16 letter, which was released Tuesday.

THE DOUBLE-EDGED SWORD OF THE ADMINISTRATION'S KORUS PROGRESS: Officials and businesses in South Korea, as well as those with investments there, were encouraged by the progress made between Seoul and Washington late last month when they reached an agreement in principle on the two countries' bilateral free trade agreement. But when it comes to specific details, a number of questions still remain, a top Korean business official said on Monday.

“We certainly hope that the specifics will follow the principles,” Kim Young Ju, chairman and CEO of the Korea International Trade Association, told reporters during a trip to Washington on Monday.

Kim, a former minister of Commerce for South Korea, noted as an example that the Koreans have been told some steel and aluminum products will be eligible to be excluded from Trump’s new tariffs on imports, “but we don’t know what items,” he said.

He also acknowledged that Seoul had secured an exemption from the tariffs as long as it caps its exports at 70 percent of the average export volume for the past three years. But, he added, “as to the permanency or lack thereof of steel exemption, we haven’t heard from USTR. They haven’t given us a clear answer. We would like some transparency.”

At the same time, however, he lauded the updated agreement in principle and particularly the speed at which talks were completed for bringing “predictability” to businesses that work with the United States. “Business plans, investment plans, and also plans including hires could be made better only if we have more predictability going into the future,” he said. “And we have that now.”

INDUSTRY: TARIFFS ON CHINESE TVs WOULD COST MILLIONS OF DOLLARS: U.S. consumers will pay an estimated $711 million more to buy TVs in the coming year if the Trump administration follows through on plans to slap a 25 percent duty on imports from China, according to a new study commissioned by the Consumer Technology Association and the National Retail Federation.

USTR included televisions on a list of approximately 1,300 products that it is proposing to hit with a 25 percent tariff to punish China for alleged intellectual property theft and forced technology transfers. In addition to that list targeting close to $50 billion worth of Chinese goods, Trump has ordered Lighthizer to potentially target up to $100 billion of additional Chinese goods.

The new study found the proposed tariffs already announced would increase prices on TVs from China by 23 percent and increase prices for all TVs by 4 percent. A TV made in China that costs $250 today would cost $308 after the tariffs are applied, and one that costs $500 today would cost $615 after the tariffs are applied, the study found.

"These proposed tariffs are bad for the economy, businesses and American consumers," Gary Shapiro, CEO and president of CTA, said in a statement that urged the administration to seize on Chinese President Xi Jinping’s recent promises of more economic reform. “Now that China has expressed some willingness to open its market and strengthen protection of intellectual property, the Trump administration should immediately initiate negotiations."

ROSS’ FOLLY? NEW REPORT CASTS DOUBT ON LNG EXPORTS TO CHINA: Ross has prominently called for China to increase its purchases of U.S. liquefied natural gas to help reduce the U.S. trade deficit, but a new report from the Center for American Progress casts doubts on the wisdom of that approach.

“The U.S. federal government should not push export deals that do not make good commercial sense and risk undermining broader U.S. competitiveness vis-a-vis China,” the report said. “Unfortunately, that is exactly what the Trump administration is currently doing.”

The report argues that the United States is not particularly well-positioned to make LNG sales to China, which already has more than two dozen other suppliers that can sell natural gas at a much lower price than it costs to ship it from the United States. Given the economics, the Trump administration could more effectively use its political capital to persuade buyers in Europe, the Middle East and the Americas to increase purchase of U.S. LNG, the report said.

“If the administration takes this a step further — as Secretary Ross is recommending — by accepting U.S.-China natural gas deals in exchange for backing off on much broader U.S. trade concerns with China, that will further undercut the U.S. economy and play right into Beijing’s hands,” the report said.

TRADE REMEDY CORNER: STEEL WHEELS KEEP ON ROLLIN’: The Commerce Department late Tuesday announced the initiation of an investigation into whether steel wheels from China are being sold at less than fair value and unfairly subsidized. The investigation was opened after Commerce received petitions from wheel producers in Indiana and Ohio. The U.S. in 2017 imported roughly $388 million worth of the wheels, which are used on vehicles. The companies allege China’s dumping margins range between 12 percent and 231 percent. The ITC will make a preliminary injury determination in the case by May 11.

INTERNATIONAL OVERNIGHT

— Top NAFTA trade officials will try to push for more progress in the talks when they meet in Washington on Thursday, Reuters reports.

** A message from ACTION for Trade: Americans support a NAFTA that better protects and values U.S. inventions and creativity. A pro-innovation environment means higher wages, better jobs, more exports and faster economic growth. A modernized NAFTA should promote market-based pricing and reimbursements systems, provide world-class protection for innovative medicines, deliver effective enforcement of copyrights online, and more forcefully confront counterfeiting and commercial piracy. Protecting innovative and creative works in U.S. trade agreements is essential for America’s economic prosperity and competitiveness. Learn more: actionfortrade.org**

About The Author

Adam Behsudi is a trade reporter for POLITICO Pro.

Prior to joining POLITICO, he covered international trade policy for Inside U.S. Trade, where he tracked down the latest news on the Trans-Pacific Partnership from exotic locales such as Auckland, New Zealand; Kota Kinabalu, Malaysia; and Leesburg, Va.

Before writing about anti-dumping, export controls and other trade subjects, Behsudi covered city hall for the Frederick News-Post. He got his start in journalism chasing crooked sheriffs and other crime-related news in the mountains of western North Carolina for the Asheville Citizen-Times

Behsudi earned his bachelor’s degree in 2005 from the University of Missouri. With the hope that journalism could return as a growth industry within his lifetime, he earned a master’s degree in interactive journalism from American University in 2010.